For the first time, the Astana Financial Services Authority (AFSA) has licensed a captive insurer to commence the regulated activities of effecting contracts of insurance and carrying on contracts of insurance, it’s been revealed.
The AFSA has issued the license to Kazakhstan Energy Reinsurance Company Ltd. (KERC), and according to an announcement, this sets a precedence for Kazakhstani firms to transfer operations and capital to the country.
The transfer of incorporation of KERC is from Bermuda, where the captive has been operating since 2004.
Under acts set by the Astana International Financial Centre (AIFC), captive insurance business is the business of effecting or carrying out contracts of insurance only for the business or operations of the Group to which the captive belongs.
KERC is an affiliated company of JSC NC, carrying on insurance within JSC NC and also the National Welfare Fund Samruk-Kazyna, which is its ultimate parent. The shareholder of KERC is a Cooperative KuzMunaiGaz U.A., which is registered outside of Kazakhstan.
In light of recent investment reforms in the country, the AIFC is eager to accelerate economic growth in Kazakhstan, and has implemented a regulatory regime that it says enables attracting capital to flow to the country, including repatriation of assets.
According to AIFC regulations, the transfer of incorporation allows KERC to continue to have all of the property, rights and privileges, and be subject to all of the liabilities, restrictions and debts, that it had prior to the continuation. At the same time, KERC was able to transfer all legal rights and liabilities to the new entity, which is the same legal person as the originally overseas-incorporated firm, and also become the subject of tax preferences, and legal regulation.
Mukhtar Bubeyev, Acting Chief Executive Officer (CEO) of the ASFA, commented: “The transfer of incorporation of the Kazakhstan Energy Reinsurance Company Ltd. to the AIFC gives a clear message that the legal framework of the AIFC supports Kazakhstani companies willing to relocate operations and assets to Kazakhstan through the AIFC, where a regulatory regime is well placed for doing financial services business and the protection of investments.”
Aigul Beknazarova, the Managing Director – Financial Controller of JSC NC, added: “We believe that the AIFC opens new opportunities for large companies conducting international business. This is a good opportunity, and we are pleased to take advantage of what this jurisdiction offers.
“This is not our first transaction on this platform, but we took advantage of the opportunity to transfer of company incorporation to the AIFC jurisdiction for the first time. We hope that the AIFC will continue to be a flexible and convenient platform for business.”
